RE: RE: RE: RE: RE: RE: RE: RE: Bhogal-1: 3200 metThe finder's fee for LEO financing went to Peninsula Merchant Syndications Corp. It's a private merchant bank controlled by Sam Magid. Sam Magid took piece of the early financing for Newstrike Capital before it was announced a Lundin-controlled shell. He also had a piece of Potash North. A private company that went public and got taken out immediately. Lundin had a piece of that. I'd venture a guess that's the Lundin connection between AOI and LEO.
LEO has 85 mm outstanding shares. 120 mm fully diluted. LEO has a shot at 50 mmboe in Kenyan Block 10A, 350 mmboe in Kenyan Block 10BB, and about 685 mmboe in Somalia. About 1 billion boe. AOI has 70 mm shares and 146 mm fully diluted. 205 mmboe on Block 9, about 137.5 on 10A, and 1390 mmboe on 10BB. 530 mmboe and 3000 BCF (~= 500 mmboe) in Ethiopia, and 3000 mmboe in Somalia. About 5.5 billion boe in total. AOI is, according to the latest presentation, targeting a 30-40% working interest in their blocks, with 0% paying interest, so numbers are going to have to be adjusted for that.
Block 9 is important for LEO. A hit there are it's positive for Block 10A in particular, but also 10BB, This gives LEO a better chance of cashing in warrants with expiry date March and April. April warrants were set at 1.60, so that's too far away, in my opinion, but I'm sure they'll extend the term. Or lower the price. Or both. April warrants would yield about $35 mm. I don't know their cash position and commitments, and if they'd need to raise cash for the June/July drilling in Somalia. AOI has $66 mm in warrants with an early-call option if the shareprice is at 2.00 or above for 20-30 days, which it by far will be if Block 9 is positive.
A single hit in any well and the shareprice goes crazy for both companies, but what you're going to have to determine is if LEO is undervalued at this point. It's my opinion, though, that AOI is the best buy at these levels because they have more concessions and they're looking at a 0% paying interest, so they can afford to sit a wait. Striking oil means the $66 mm cash injection, and that paves way for future acquisitions. However, just something slightly good from Block 9 and you'll be back in the green soon, and if not, Somalia is a concession where they've expressed they're pretty certain they're going to find oil, so it's a good backup for LEO.